The Thai market may get a delayed post-election 'bounce,' Credit Suisse says

I think that there will be a good trading opportunity for Thailand. Historically, the market has underperformed in advance of elections, but outperformed after elections, after a stable government has formed. This time around, I think we will get a post-election bounce, but possibly with the delay. The issue is that although the opposition want a clear majority in the lower house, they need the support of senators in the upper house to form a government. And there are lingering concerns that we would potentially have a unparliament. I think that we'll get a stable government and that once that happens, we'll see a rally. But in the meantime, our clients are telling us they're confused and I think that the market will be treading water for the next several weeks.

Now, I just want to switch gears a little bit. I wanted to ask you because I was looking over your recent note and it just sort of runs contradictory to what I suppose the consensus belief is when it does come to Indonesian. It not necessarily being commodities, the most important thing for Indonesia moving forward. And when they're talking about all of the measures that they've got in place in terms of trading the industries around commodities. And you don't think that's necessarily the case. So why is that line of thinking wrong? Because you know as well as I know that that's the consensus belief. And that's where the expectation is that all the money is going to be flowing through for the next five, 10, 20 years.

I think the key issue is time horizon. Right now, clearly commodities are critical for Indonesia. The big story the past couple of years has been a massive improvement in terms of trade, which is partly due to the boom in commodity pricing. But if we look at the long term outlook five to 10 year or beyond view, Indonesia has to do better in the non commodities part of its economy. Actually, Indonesia doesn't have a huge amount of natural resources on a per capita basis. Yes, on a national basis in absolute terms, it's got a lot of mineral wealth, but it's got 275 million people. And that's a lot of a lot of mouths to feed.

And Indonesia has to move beyond commodities if it wants to continue developing. And the reason why I asked that, do you think that this is an opportunity or a misallocation of capital that's currently occurring? Because I completely take your point that you could perhaps be if you're thinking about investing in Indonesia right now, instead of looking at commodities, perhaps be looking at things in terms of things that are connected to standard of living improvements, because you would imagine with a little bit of a commodity boom that's going to pass through perhaps infrastructure that people should be looking at other sectors to try and take advantage. And if so, which ones? Well, I think on a three to six month view, what's going to be mattering is earnings, valuations, commodity pricing, not these long term issues that we've been discussing right here. In the short run, what we've got is better earnings momentum in Indonesia than most markets. And because of that, the valuations are still actually quite reasonable, even though the market has outperformed the past couple of years. So I think that Indonesia is still a pretty good option for most people. But I think that we need to change the prism through which we examine the long term prospects for the country.

CNBC